Overview for the Week Ahead 

Eurozone inflation will carry on declining in the months ahead but at a slower pace, Bundesbank President Joachim Nagel was quoted as telling Cypriot newspaper Kathimerini on Sunday.  

Eurozone inflation eased to 2.4% in November from 2.9% in October, well below expectations for a third straight month and fuelling market speculation that European Central Bank (ECB) rates could come down quicker than the bank now guides.  

Nagel added that the outlook for inflation was tempered by a weakening of dampening base effects and the phasing out of measures to cap high energy prices in many European countries. He also pointed to an expected continuation of strong wage growth.  

The U.S. dollar, as measured by the DXY index, fell nearly 3% in November, weighed down by the downward correction in U.S. yields triggered by bets that the Federal Reserve has finished raising borrowing costs and would move to sharply reduce them in 2024 as part of a strategy to prevent a hard landing.  

While some Fed officials have been dismissive of the idea of aggressive rate cuts in the near future, others have not entirely ruled out the possibility. Despite some mixed messages, policymakers have been unequivocal about one aspect: they’ll rely on the totality of data to guide their decisions.  

Given the Fed’s high sensitivity to incoming information, the November U.S. employment report, due for release next Friday, will take on added significance and play a critical role in the formulation of monetary policy at upcoming meetings.  In terms of estimates, non-farm payrolls (NFP) are expected to have grown by 170,000 last month, following an increase of 150,000 in October, resulting in an unchanged unemployment rate of 3.9%. For its part, average hourly earnings are seen rising 0.3% m-o-m, with the related yearly reading easing to 4.0% from 4.1% previously.   

Have your trading charts ready this week!  

This Week’s High Impact Events 

The times below are GMT +2.  

Monday 4^th December 

09.30 – Switzerland – CPI m/m Potential instruments to Trade: CHF Crosses.   

Tuesday 5^th December 

05.30 – Australia – Cash Rate, RBA Rate Statement 

Potential instruments to Trade: AUD Crosses.   

17.00 – US – ISM Services PMI, JOLTS Job Openings 

Potential instruments to Trade: USD Crosses.    

Wednesday 6^th December  

02.30 – Australia – GDP q/q 

Potential instruments to Trade: AUD Crosses.   

13.00 – UK – BoE Gov Bailey Speaks 

Potential instruments to Trade: GBP Crosses.   

15.15 – US – ADP Non-Farm Employment Change 

Potential instruments to Trade: USD Crosses.   

17.00 – Canada – BoC Rate Statement, Overnight Rate 

Potential instruments to Trade: CAD Crosses.    

Thursday 7^th December  

15.30 – US – Unemployment Claims 

Potential instruments to Trade: USD Crosses.    

Friday 8^th December  

15.30 – US – Average Hourly Earnings m/m, Non-Farm Employment Change, Unemployment Rate 

Potential instruments to Trade: USD Crosses.   

17.00 – US – Prelim UoM Consumer Sentiment, Prelim UoM Inflation Expectations 

Potential instruments to Trade: USD Crosses.   

Saturday 9^th December  

03.30 – China – CPI y/y 

Potential instruments to Trade: CNY Crosses.  

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